Last week, the European Commission announced that it has referred Austria to the CJEU for Austria’s failure to apply the Tour Operator Margin Scheme (TOMS) correctly. Currently, Austria does not correctly apply this rule because it currently excludes travel services sold to other businesses from the regime.
The TOMS rules for travel agents means that VAT is to be applied only on the margins made from sales of travel services to consumers. Travel agents cannot deduct the amount of VAT they pay while buying services from other businesses.
It remains to be seen whether Austria will bring its VAT treatment of services offered by Travel agent in line with rules of TOMS. VAT IT will closely monitor this as keep you updates as it develops.